Schemes are seemingly shoring up their portfolios in preparation for expected twin risks of inflation and interest rate rises.

According to data from our sister title MandateWire, European institutional investors ploughed more than £4.8bn into index-linked bonds in the second quarter of 2014. This is compared with outflows of £1.1bn in the first quarter.  

This interest was further evidenced on Tuesday when the government’s £5bn sale of index-linked bonds maturing in 2058 was oversubscribed, even though it was the first time the debt management office priced linkers at a negative real rate.  

According to the Financial Times, Deutsche Bank, Goldman Sachs, Morgan Stanley and RBS priced the bond at minus 0.073 per cent. The bond will pay investors a coupon of 0.125 per cent and has a return linked to the retail price index.  More than 100 investors put in orders totalling more than £14bn.

A fixed income manager I spoke to this week told me that floating-rate assets have also become of interest to many schemes looking to hedge against interest rate rises. The manager’s multi-asset credit portfolio is now overweight in variable rate fixed income.

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Any other business: Low voter turnout has plagued many elections. As the famous apocryphal quote from US politics runs, “A low voter turnout is an indication of fewer people going to the polls”. 

The gradual economic recovery is welcome news for the Pension Protection Fund, with buoyant equity markets and stronger companies outweighing some losses in its liability-driven investment strategy. 

The organisation's annual report released today showed an increase in the likelihood of the pensions lifeboat of being self-sufficient by 2030 to 90 per cent in the year to March 31 2014, from 87 per cent in 2013.

PPF chair Lady Barbara Judge and CEO Alan Rubenstein said the increase in funding level was due to a “new” low level of claims and fewer companies becoming insolvent.

Judge said the self-sufficiency metric was slightly higher than target. “One of the reasons is because there have been less bankruptcies this year, and pension funds are better funded,” she said, adding: “The pensions lifeboat continues to sail smoothly on towards its goal.”

There was also an increase in funding level to 112.5 per cent from 109.6 per cent. “This shows the investment strategy is working… we were up 2.9 per cent above our benchmark,” said Judge. “Also, the economy is doing better.”

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Finally some details on the guidance guarantee. Soon-to-be pensioners will receive independent guidance from April 2015, as the government clarifies the guidance guarantee announced in this year’s Budget.

The delivering partners at launch will include The Pensions Advisory Service and the Money Advice Service. In a recent editorial, we predicted TPAS would have a leading role in delivery of the guidance. 

“The government welcomes expressions of interest from a range of trusted consumer-facing organisations, including Citizens Advice and Age UK,” chancellor George Osborne said in the written ministerial statement.

Michelle Cracknell, chief executive officer of TPAS, said in a press statement that "a personalised conversation with someone who understands the issues affecting people as they come close to retirement can be life-changing".

The preparatory work will cost the government £10m, and the Treasury is seeking approval for a further £10m. The guarantee will also be funded by a levy, payable by "regulated financial services firms and those operating in the pensions market".

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Advances in biomedical sciences have dramatically increased lifespans, which poses a real risk to a lot of schemes, with many now looking at the best ways to reduce such a risk.

Aubrey de Grey, a biomedical gerontologist (gerontology is the study of ageing) and founder of the Sens Research Foundation, has said that the first person to live to 150 years old has already been born and that someone born within the next 20 years could live to be 1,000.

For anyone that runs a pension scheme this could be a frightening thought. 

News earlier this month that telecoms giant BT hedged 25 per cent of its total exposure to improvements in longevity was the catalyst for a flurry of longevity-related announcements.  

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Data have been a sticking point for many schemes and employers. Who can blame them? Of all the areas of pensions, data isn’t the most inspiring and engaging to newcomers. 

However, as many employers are coming to find out, it is an extremely important subject. A new group called Friends of Auto-Enrolment, the brainchild of the Chartered Institute of Payroll Professionals, is attempting to create a data standard to help employers auto-enrol more easily.

Friends of AE and Pensions BIB – an informal collaboration between BCS Payroll Group, IReeN, which is a user group for online electronic exchange between employers and HM Revenue & Customs, and BASDA HR & Payroll Special Interest Group – are working to achieve a free-to-use, open, unlicensed data standard for auto-enrolment.

(Note: BIB is just the first initial of each organisation’s name).  

The group published the first draft of its pensions and payroll data standard this month.  

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The Law Commission has released what has been branded a “common sense” guide for trustees, clarifying their fiduciary duties in respect of responsible investment as well as weighing in on defined contribution scheme governance.